Amalgamated Bank Launches Debt Arm For Lower Mid-Market
BY RIMIN DUTT
9/23/2009 – Looking to meet the demand for senior debt in the lower middle market,
Amalgamated Bank has launched Amalgamated Capital, a unit that will provide cash-
flow-based senior debt to companies that are valued at up to $150 million.
The division is being led by Executive Vice President and Director Timothy G. Clifford,
who has more than 18 years of experience in middle-market lending.
Amalgamated Capital will draw down capital from its parent's balance sheet, tapping
into a $3 billion depository base, said Clifford. Lending to the lower middle market is
"virgin territory" for the New York bank, but it hopes to beef that up and deploy between
$100 million and $150 million into private equity deals annually, he said.
"We are not going to be capital constrained," he said, adding the division will also look
to expand geographically.
The unit will focus on senior debt and revolving term loans for companies that are
valued at up to $150 million and that have earnings before interest, taxes, depreciation
and amortization of $3 million to $20 million. Amalgamated sees an unmet need in this
space, as many lenders remain on the sidelines due to their reliance on outside credit
The firm also finds attractive the risk-adjusted returns in senior lending, which can range
from 7.5% to 10%, he said. Another upside of operating in the lower end of the market
is "you don't need as many [partners] to get a deal done," he said.
However, the firm will be staying away from mezzanine and second-lien loans. "We
don't want to get distracted by junior capital," said Clifford, adding he sees the junior
capital field as crowded with mezzanine players.
Amalgamated Capital plans to invest in a variety of industries but will stay away from
"fad-related" sectors such as specialty retail and apparel, said Clifford.
Before joining Amalgamated this month, Clifford was a managing director and principal
at Churchill Financial LLC and headed its Boston office. In that position, he led
origination deals of senior and subordinated debt financing along with equity co-
investments for middle-market deals. Before joining Churchill in 2006, he had been
senior vice president and group head of leveraged finance at Comerica Bank.
Churchill Financial has not invested in a deal since February, when it provided senior
debt for TGF Management Corp. and Austin Ventures' acquisition of Sterling Foods
Ltd., according to its Web site.
Amalgamated Capital plans to start small; the division has a team of three people
currently. It plans to hire one or two professionals by the end of the year. "There was no
need to start our team as a kingdom," he said.
In addition to directly leading to deals, the bank will look to team up with other lenders in
the space and will invest in deals requiring up to $60 million in senior debt, he said.
Reach Amalgamated Bank at 212-894-3000.